Reliance wants to make greater strides in insurance market

A performance celebrating the 25th founding anniversary of Reliance Insurance, a leading first generation non-life insurance company, at Pan Pacific Sonargaon Hotel in the capital on Thursday night. Photo: Star

Reliance Insurance, a leading first generation non-life insurance company, celebrated 25 years of its existence on Thursday night with a vow to achieve greater success.
The programme at Sonargaon Hotel began with the silver jubilee theme song, “Reliance, Reliance, Rely on Reliance”, presented by singers Bappa Majumder and Fahmida Nabi.
After the song, Reliance Insurance Chairman Shahnaz Rahman gave her welcome address and said the position Reliance held today was that of a top class insurance service provider with a strong financial base, an impressive claim settlement record and ability to provide professional service of the highest order.
“We have always emphasised professional management of the company, and this has been its key to success over the years,” she said.
“Going forward, we see Reliance as a dynamic company quickly adapting itself to the challenges of the 21st century and achieving further progress through diversification, introduction of new products and services.”
Incorporated as a public limited company in 1988, Reliance was listed on the stock market in 1995. The company transacts all kinds of non-life insurance business, and its products and services include property, marine, engineering, motor and miscellaneous insurances.
The company's turnover stood at over Tk 1,490 million at the end of 2012. It made a net profit of around Tk 204 million during the same period. It carries its insurance activities through 31 branches across the country in addition to the head office in Dhaka.
Akhtar Ahmed, managing director and chief executive officer of Reliance Insurance, said Bangladesh was a small insurance market, ranking 69th in the world.
The market is fragmented with a large number of insurance companies, incommensurate with the size of the market that is less than $1.25 billion of premium, he said.
“We had a total of 70 insurance companies, a further 12 licences were issued last year for reasons better known to the policy markers, making the market more crowded and competitive.”
 

Reliance Insurance Chairman Shahnaz Rahman gives her welcome address. Photo: Star

According to Ahmed, although the Bangladesh market has had double digit premium growth for most of the past years, the real growth is yet to be achieved.
As percentage of the GDP, the total penetration rate is less than 1 percent, he said. “Particularly for non-life insurance, this has been stagnating at around 0.2 percent for many years.”
Such a nominal penetration rate in non-life insurance sector is rather low even by the standard of developing countries, and this points at serious deficiencies, he said.
Ahmed said the industry was virtually putting sole reliance on commercial and industrial lines of business, to the extent of possibly 80 to 90 percent of market premium. "Even for industrial and commercial lines of insurance, business and potentials have not been fully explored and tapped."
Insurance of personal lines business has remained weak mainly due to negative perception of the public at large of the insurance industry as a whole, he said. “Evidently, there is customer dissatisfaction over pricing of insurance, quality of services and claim settlement.”